How Urgent Is Your Organization's Need For Change?

In the early 2000s I was blown away by the power of Continuous Improvement, and read all articles I could find about the Toyota Production System and Deming Cycles. There's an enormous power in doing things the right way that Lean and agile can really help with.

If you are at an early stage of a prosperous S-curve you might be fine focusing almost all your development resources on improving how you do the things you are already doing. But in this era of rapid change most of us needs to focus much more on whether we are at all doing the right things - rather than if we are doing them the optimal way.

Transformation can be costly, so a good start is to understand how urgent your organizations need for change is. But have do you know?

There is a super smart tool called the Growth Gap that we first came across in a 2014 Harvard Business Review article (https://hbr.org/2014/12/build-an-innovation-engine-in-90-days).

1. Start by projecting how far your current business will take you in 5 years. Measure it in terms of what matters most to you - is it financial metrics as revenue or profit, or more abstract goals as customer expectations or employee retention? If you quantify your current performance, and then continuously improve that for five years - plot that as a graph.
2. Then look at you business plan, your BHAG or you vision statement. What should that same number be in 5 years for you to be fulfilling your goals? Plot a graph from you current situation to that level.
3. Now your Growth Gap is the area in between the two graphs.

What does this tell you?

A small gap compared to the area below your current trajectory says you are doing pretty good and only need some small bets to hit home to reach your desired position. You can likely run fairly safe experiments and focus most of you attention on improving your current operations.

A large gap means you need several bets to turn into homeruns, and better professionalize your experimentation work by establishing a Continuous Strategy Process, read more about that here. If your an Innovation Professional struggling to get your top management to focus on Innovation, calculating your Growth Gap can be just the tool you need to create a sense of urgency.

Do you want help calculating your Growth Gap, contact me and my team. Interested in knowing more? Sign up for our webinar here. And please reach out to discuss, I'd love to hear your reactions!

Innovation360 is a data-driven innovation management consultancy. Our mission is to strengthen the global innovation capability needed to address humanity’s grand challenges: food, energy, water, security, global health, education, environment, poverty and space. Therefore, our aim is, to help 1,000,000+ entrepreneurs, companies, executives and scientists all over the world to become world-class innovators.